FTC Sues Ticket Reseller Key Investment Group, Alleging Illegal Tactics

Ticket reseller Key Investment Group said Monday (Aug. 18) that it will “vigorously defend itself” against a Federal Trade Commission lawsuit.

The FTC announced the lawsuit Monday, alleging in a press release that Key Investment Group and its affiliated companies, including Epic Seats, TotalTickets.com and Totally Tix, violated the FTC Act and the Better Online Ticket Sales Act (BOTS Act) by using illegal tactics to bypass the ticket purchasing limits implemented by Ticketmaster.

The regulator alleged that the defendants used thousands of Ticketmaster accounts to buy tickets, used thousands of virtual and traditional credit card numbers, hid their identity by using proxy or spoofed IP addresses, and used SIM boxes to facilitate the receipt of verification codes sent to the phone numbers associated with the accounts they used to buy tickets.

“President [Donald] Trump made it clear in his March executive order that unscrupulous middlemen who harm fans and jack up prices through anticompetitive methods will hear from us,” FTC Chairman Andrew N. Ferguson said in the release. “Today’s action puts brokers on notice that the Trump-Vance FTC will police operations that unlawfully circumvent ticket sellers’ purchase limits, ensuring that consumers have an opportunity to buy tickets at fair prices.”

Reached by PYMNTS, a Key Investment Group representative said in an email that the FTC’s lawsuit misapplies the BOTS Act and “threatens to dismantle the secondary ticket market for live events, further consolidating power in the hands of the industry’s largest monopoly.”

“In an unprecedented move, the FTC has twisted the intent of the Better Online Ticket Sales (BOTS) Act, a law designed to target malicious software, into a weapon against legitimate businesses and consumers,” the representative said. “Under the FTC’s interpretation, anyone who purchases more than four tickets or uses more than one account could be deemed in violation of federal law. That outcome is not only illogical, it’s absurd.”

“Even more troubling, the FTC misleadingly characterizes Key Investment Group’s use of standard internet browsers to purchase tickets as equivalent to deploying unlawful software,” the Key Investment Group representative said. “This portrayal is both deceptive and malicious.”

Key Investment Group said in a July 21 press release that it filed a lawsuit against the FTC, saying that the FTC’s interpretation of the BOTS Act is inconsistent with the statutory text, legislative history and intent of the law.

Trump signed an executive order March 31 directing the attorney general and the FTC to ensure that competition laws are enforced in the concert and entertainment industry.

In May, the FTC and the Department of Justice opened a public comment period to gather feedback on allegedly unfair and anticompetitive practices in the live event ticketing industry.